India outsourcing giants eye more European acquisitions

Companies such as Infosys, Tata Consultancy Services and HCL Technologies are said to be in the midst of buying over European IT services companies to build up their presence in the region.
Written by Kevin Kwang, Contributor

Top Indian outsourcing companies are lining up acquisition targets in Europe as they scramble to capitalize on companies in the region which are increasingly embracing offshoring their operations to cut costs.

In a report by Economic Times Monday, outsourcing giants such as Infosys, Wipro, Tata Consultancy Services and HCL Technologies, were identified to be actively looking to buy service providers in France and Germany. Unnamed sources also said at least three planned acquisitions, each valued at under US$50 million in Germany, and another in France at over US$100 million are in the final stages of negotiations.

The sources were unable to name the companies involved as they are advisors to the deals and are bound by non-disclosure agreements, the report added.

Acquisition activities in Europe have already been ramping up. In January, Mumbai-based IT services company Geometric bought German company 3cap Technologies for about US$15 million, while Cognizant acquired six companies from Germany's C1 Group.

"This gives us not only technology, but existing client relationships in Germany, which is critical," said Manu Parpia, MD and CEO at Geometric, in the report

The bulk of outsourcing deals from Europe comes from the United Kingdom and the Nordic region, and Europe is forecasted to contribute a little under 30 percent of the US$76 billion in exports the Indian IT-BPO industry is expected to generate in the year ending March 2013, according to Economic Times.

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